Xbox CEO Asha Sharma told staff in an internal memo that Xbox will return to player and revenue growth by the end of fiscal year 2027, which runs through June 2027, and will improve profits back in line with industry averages The Verge. The memo, obtained by The Verge, is the most detailed public account of Sharma's plan since she took over Microsoft's gaming division in February 2026, after Phil Spencer retired as head of Microsoft Gaming Reuters.

Sharma built the plan around four priorities. CORE means strengthening Xbox's platform, led by the console itself. CONTENT means growing games into global franchises. CREATION means making Minecraft the world's go-to platform for people who build their own game content. CONNECTION means extending the game worlds that fans love into new areas. She said every team and studio will share responsibility for the growth goals.

The memo also laid out three stages for measuring progress. Stage 1 is returning to growth by end of FY2027. Stage 2 is turning new bets into growth during FY2028 and FY2029. Stage 3 is scaling what works by FY2030. By fiscal year 2030, the stated ambition is to be halfway to Xbox's long-term daily-player goal, with sustained double-digit growth in players and engagement, and profit margins that lead the industry.

Sharma shared that Xbox currently brings together more than 100 million people every day, more than 500 million each month, and nearly one billion each year. She said the console generates the majority of Xbox revenue and remains the foundation of Xbox fandom and its flagship experience. The console, Xbox's operating system, Game Pass (Microsoft's subscription service for games), Windows, and streaming are positioned together as the platform for new players and developers.

On the content side, Sharma said Xbox is shifting its studio system from a setup where individual studios operate independently to one more focused around its strongest franchises and biggest new ideas. Three Xbox franchises already generate more than $1 billion annually, though she did not specify which ones. Xbox plans to lean on Candy Crush-maker King and Microsoft Casual Games to grow its share in casual games, and Sharma said Xbox will invest in Minecraft more than ever before. The company will also build long-term plans for its biggest franchises across film, television, consumer products, sponsorship, live experiences, and new global partnerships including China.

The memo arrives roughly six months into Sharma's tenure and follows a turbulent stretch for the gaming division. In early July, Microsoft cut 4,800 jobs, including many at Xbox, marking the first major restructuring under Sharma as CEO AP News. In a memo addressing the layoffs, Sharma wrote: "Our business today is not healthy" AP News. Prior to the cuts, Reuters reported in June that Microsoft had considered spinning off Xbox, according to a report by The Information Reuters. The same reporting noted that Sharma plans to increase spending to accelerate development of new Xbox titles.

Game Pass has also undergone pricing and packaging changes under Sharma. In April 2026, Xbox Game Pass Ultimate was cut to $22.99 per month from $29.99, and PC Game Pass was priced at $13.99 per month. At the same time, Call of Duty was removed from the list of games that subscribers can play on launch day Reuters.

The combination of a price cut on the top subscription tier, the removal of a major launch-day draw, and the acknowledgment that the business is "not healthy" creates a picture of a unit in active repositioning rather than steady-state execution. Sharma's memo now attaches specific milestones to that repositioning. The question is whether the four-priority structure and the three-stage timeline can turn operational discipline into the growth numbers she has committed to.

The broader context here is a tension built into the plan itself. The CORE priority reaffirms the console as the platform's foundation and primary revenue source, while the CONTENT and CONNECTION priorities push investment toward franchise expansion across non-gaming media and casual gaming. Sharma is simultaneously asking the organization to focus — concentrating studios around its strongest franchises — and to broaden, through casual games, the Minecraft creator platform, transmedia IP, and China partnerships. Whether focus and breadth are compatible within the FY2027 window she has set is the question the memo leaves unanswered.

The studio reorganization also signals a shift away from the independent model Xbox has operated under since its acquisition of Activision Blizzard, which brought a large portfolio of separate studios into the company. Moving toward franchise-centric alignment is a structural change that will test execution across dozens of teams, and the memo's pledge that every function and studio will own part of the growth outcome suggests accountability will be shared but measured against common targets.

For developers and platform watchers, the positioning of Xbox's operating system, Game Pass, Windows, and streaming as a unified platform layer is the element most likely to shape the ecosystem's direction. If Game Pass pricing stabilizes at the April levels and the studio reorganization produces a steadier flow of new releases, the subscription service's value proposition enters a new phase. The removal of Call of Duty launch-day access, however, means that proposition now rests on the depth of the game library and how well the platform pieces work together, rather than on having a blockbuster available on day one.

Sharma's memo does not address the spin-off speculation directly, nor does it reference the Game Pass pricing changes. What it does is establish a public scorecard. By the end of FY2027, Xbox has committed to growth in players and revenue, and to profit margins in line with industry averages. The three-stage roadmap extends that commitment through 2030, with the ambition of sustained double-digit growth and industry-leading margins. The targets are now on record. The execution timeline is underway.